By DAVID E. SANGER

Published: March 19, 2001

WASHINGTON, March 18—
Prime Minister Yoshiro Mori of Japan arrived here this afternoon for his first, and likely last, encounter with President Bush, as both Japanese and American officials acknowledged that they had made virtually no progress on drafting a joint statement to reassure world markets that Japan had a firm plan in place to restore economic growth.

The White House had hoped to transform Monday's meeting with Mr. Mori from a ceremonial first visit to a substantive discussion of the risks ahead for both economies if Japan is unable to resolve its looming banking crisis and stock market downturn.

But a senior Japanese official said today that Mr. Mori was arriving with ''nothing new to say.''

Meanwhile, some Japanese financial officials have complained that the decline in the American markets is worsening Japan's long-term troubles, especially for Japanese banks holding American equities.

The finger pointing between Tokyo and Washington has only complicated the politics of Monday's session. Japanese officials say they now hope Mr. Bush and Secretary of State Colin L. Powell will stick close to a prepared script, reaffirming the importance of the security relationship with Japan, apologizing for the sinking of a Japanese ship by an American submarine near Hawaii -- and going light on economic critiques.

It remained unclear tonight what strategy Mr. Bush would choose in discussing the economy.

''The Japanese problems are humongous in comparison to whatever cyclical downturn is affecting the United States,'' said Kenneth Courtis, vice chairman for Asia at Goldman, Sachs, the international investment bank. ''There is a Himalaya of debt crashing down on the Japanese economy, and the plan that the Japanese have now has only sent the markets in Tokyo down another 7 percent. This is the biggest problem in the world economy today, and it's made worse by super weak governments in Tokyo.'' That last item is not an issue Mr. Mori is likely to talk about.

Monday's visit marks the first of three international encounters for Mr. Bush this week in which his words, tone and body language will be watched with unusual care.

As Mr. Mori makes his one-day visit on Monday, Israel's new prime minister, Ariel Sharon, will be here seeing General Powell, as well as Defense Secretary Donald H. Rumsfeld; Condoleezza Rice, the national security adviser; and the director of central intelligence, George Tenet.

On Tuesday Mr. Sharon, who met Mr. Bush in Israel three years ago, will come to the White House seeking the president's tacit approval of his approach to the Palestinian leader, Yasir Arafat, far more cautious and hard-line than that of his predecessor, Ehud Barak.

On Thursday China's deputy prime minister, Qian Qichen, is scheduled to visit the White House, a session likely to be dominated by talk of China's foot-dragging on its entry into the World Trade Organization and Mr. Bush's pending decisions on whether to sell advanced arms to Taiwan and to move ahead with missile defense.

''In the space of one week,'' a senior State Department official said Friday, ''we've got to make a start on the three toughest problems Bush is likely to face this year: Japan, the Middle East and China.''

Just a few months ago, the Bush administration thought it had a strategy worked out for two of these encounters: an elevation of the Japan alliance, which Mr. Bush's foreign policy aides say President Clinton allowed to deteriorate, and a repositioning of China as a ''strategic competitor'' and occasional economic ally, but not the ''strategic partner'' Mr. Clinton frequently talked about.

Mr. Bush also vowed that as part of his ''humble'' approach to foreign policy, he would not lecture the Japanese in public about how they should revive their economy.

''We have to regard Japan as a mature, independent country that determines its own destiny,'' Lawrence B. Lindsey, Mr. Bush's top economic adviser, said in an interview last week. ''Even if we are the older brother and Japan is the younger brother, we have both grown up as democracies. When you are 14 and 8 years old there is a disproportionality in the relationship that doesn't exist when you are 46 and 40.''

Many Japanese officials wince at the use of the big-brother, little-brother analogy, saying it has shades of the terminology used during the American occupation of Japan after World War II. But oddly enough, some Japanese bureaucrats argue privately that a more public critique of Japan might be politically useful to reformers in Japan, because it could help force the Liberal Democratic Party to justify long overdue economic changes that are resisted by its key constituencies.

The most important of such reforms, likely to be discussed privately on Monday but scarcely mentioned in the joint statement, is a cleanup of the huge real estate debts that threaten the integrity of Japan's banking system. The Japanese government made a halfhearted attempt at bailing out the banks three years ago, spending hundreds of billions of dollars of taxpayer funds to pump up the banks' balance sheets. But the banks and the politicians could not stomach closing many insolvent banks and selling off real estate at fire-sale prices to get the market going again, the strategy the United States used in the savings and loan crisis in the 1980's.

In Japan, that would probably lead to bankruptcies in the construction and retail industries, and large layoffs. But now the Japanese government, already deep in debt, cannot afford another huge bailout. Meanwhile, Mr. Mori is about to lose his job, and politicians do not want to make any difficult decisions before a national election, probably this summer.

''The question is whether we can wait that long,'' one of Mr. Bush's aides said last week.

Photo: Prime Minister Yoshiro Mori of Japan was greeted by Bill Koepler of the State Department on his arrival yesterday at Andrews Air Force Base. (Agence France-Presse)